These days it is not altogether surprising to hear employees being offered and early retirement package. Most companies are looking at the bottom line. By offering this kind of deal to older employees, they don’t have to downsize.
This is happening in every part of the business world — whether it is public or private sector. However, it is critical that you understand the ramification of accepting one of these packages. Most of them are alluring enough to make anybody consider this possibility, but it’s not always the best choice. You have to read everything very carefully to make sure that this plan will suit your immediate and future needs.
Generally speaking, an early retirement is simply offering an employee money to retire before he has planned. For the most part, firms will include a rate that takes into account the years of service and salary amount. There are also health benefits and in many cases, level term life insurance.
But are you in a position to make this change?
This question should be based upon several factors, including the type of lifestyle that you are used to living, the needs of your family and what your current financial status is now. For example, an employee retiring ten years early has to ask whether there are sufficient funds available. There are some precautions that you can take to make this possibility easier. They include the elimination of large debts, downsizing your lifestyle, putting some money away for emergency purposes only and getting rid of credit card debt.
You will probably need to look at health insurance as well since it is typically not offered. You may even have to bear the cost if it is. Sometimes this amount may be more than you’ve bargained for. However, it is essential for you and your loved ones to have medical insurance. If your spouse works, may there is a proviso to get an extended plan. Level term life insurance is another area that may or not be covered, however, it is very limited and you may bear the cost as well. You will need this protection too even if your employer doesn’t include this in the retirement package.
Most firms also offer a pension plan. The drawback here is that you can’t access these funds until reach a certain age. All of these options should be first discussed with the administrator in charge of the plan.
There is also the issue of level term life insurance payments.
Many insurance companies don’t pay out until you are 60 years of age. This means that if you take that early retirement, you won’t get any benefits until reaching their minimum age. There is also the possibility of rejoining the work force at some time. However you will probably only be able to work part time in order to keep receiving insurance benefits.
There are a lot of questions that you have to answer.
Probably the most vital one aside from the topic of money is what are your plans are for the balance of your life. After working for forty to fifty years, the question for most people is one that they are not prepared to answer. If is critical that you know the answer to this question. A number of people simply didn’t know what to do with their time once they retired.
While work wasn’t always considered “fun”, it did have some positive qualities. There was a sense of purpose, with the ability to socialize with co-workers. There was also a structured environment where you knew what was expected. This isn’t always the case with retirement.
In a bad economy, companies are always looking towards the bottom line. This could mean an early retirement package will be offered to the most senior employees. If you are in this category, you should start looking at all of the options to see what makes the most sense to you and your family.

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